In 1985, in a suburb south of Boston, John Bennett is a lonely child who wishes for his new Christmas gift, a teddy bear
he names Teddy ("Ted"), to come to life to be his best friend. The wish
succeeds with a falling star one night and Ted becomes fully alive. The
newly sentient toy briefly becomes a minor celebrity, but never loses
sight of his friendship with John.

Twenty-seven years later in 2012, John (Mark Wahlberg) and Ted (voiced by Seth MacFarlane), now living in the South End neighborhood of Boston,
are still staunch, if immature, friends enjoying a hedonistic life,
even while John is pursuing a relationship with an office worker named
Lori Collins (Mila Kunis).
Lori hopes to marry John, but she feels that he cannot move ahead with
his life with Ted around, who is now a complete wastrel. John is
resistant to kicking Ted out, but he is finally persuaded one night to
act when he and Lori discover Ted at home with four prostitutes.

Soon, John finds Ted his own apartment and a job at a grocery store,
where his irresponsible behavior on the job somehow manages to get him
both promoted and acquainted with his co-worker Tami-Lynn (Jessica
Barth). Ted and John still spend most of their time together, which
irritates Lori when she discovers John has been skipping work to do so
while using her for his excuses. Meanwhile, an obsessed stalker named
Donny (Giovanni Ribisi), who idolized Ted as a kid, shows interest in possessing him for his destructive son Robert (Aedin Mincks). Things start to come to a head when Lori and John are invited to a party put on by Lori's manager Rex (Joel McHale), who has a lust for her. They attend, but Ted lures John away to a party at his apartment with the offer to meet Sam Jones, the star of their favorite movie Flash Gordon.
Although John arrives with the intention of spending only a few
minutes, he gets caught up in the occasion which gets completely out of
control, with Sam persuading John and Ted to snort cocaine
with him. Eventually, Lori discovers John there and breaks up with him
in tears. At that, John blames Ted for ruining his life and tells him to
stay away.

Eventually, Ted and John confront each other about their ruined
friendship in John's hotel room and have a brawl after John provokes
Ted, but soon manage to reconcile after the TV falls on John's crotch.
To repair John's relationship with Lori, Ted arranges through Norah Jones (played by herself) for John to express his love for Lori with a song during a concert, being held at the Hatch Shell.
Although John's performance proves an embarrassment, Lori is touched by
the attempt while repelled by Rex's sneering. Later, Ted goes to visit
Lori and explains that he was responsible for John's lapse: however, he
offers to leave them alone forever if she goes to speak with him. Lori
is persuaded, but moments after she leaves, Ted is kidnapped by Donny and taken to his house as Robert's unfortunate playmate.

Ted manages to distract Robert and reach a phone to contact John (but
not before his ear is ripped off by Robert), but is soon recaptured.
Realizing that Ted is in danger, John and Lori find Donny's residence
and chase him and Robert to rescue Ted. The chase leads to Fenway Park,
where Robert tries to stop John and Lori from getting to Ted first,
only to have John knock him out. During the chase, Ted gets himself
damaged and just when Donny grabs him on the tower, Ted falls onto the
field, torn completely in half. Donny is forced to flee when a police
car shows up. As John and Lori gather his stuffing, Ted relays his wish
that John be happy with Lori, as his life fades away.

Unable to accept Ted's death, John and Lori return to her apartment
to try to repair him, but it proves useless. That night, Lori makes a
wish on a falling star. The next morning, Ted is magically restored and
the couple reconcile with Ted, who encourages John and Lori to resume
their relationship. With that resolution, John and Lori get married
(with Sam Jones as their priest) and Ted accepts having his own life.

I am the same as mjande in this situation. I can only speak on what I would allow my child to watch. And we have see the movie, BUT didn't allow our children to watch it. And they are 11, 10 and 9 years old.

I don't know why you'd want to. It's not a kids movie and was rated R in the theaters and unrated on the blu-ray. I don't know any 7 yo that would get most of the humor. There isn't really anything in it for kids. We passed on that one, lol.